Pennsylvania push bill to regulate prediction markets
Legislators in Pennsylvania introduced House Bill 2711 on Wednesday, establishing a regulatory framework for prediction market platforms such as Kalshi and Polymarket. Representative Tarik Kahn introduced the measure, which is supported by 24 bipartisan co-sponsors. It aims to align prediction markets with consumer protection standards similar to those governing sports betting.
Prediction markets have straddled the line between legitimacy and controversy for a while now. Academic experiments have already described their forecasting power. But regulatory uncertainty remains the biggest barrier. Today, platforms like Kalshi and Polymarket represent the industry’s mainstream evolution, but Pennsylvania’s HB 2711 highlights the unresolved tension between federal and state oversight.
Consumer protections and integrity measures
The proposed bill would provide certain requirements, such as operators providing self-exclusion programmes and monitoring for market manipulation involving staff with access to non-public information. They should also report potential insider trading to state authorities.
The prediction market platforms’ growth has surged exponentially: global trading volume is projected to reach $240–325 billion in 2026, up from just $15.8 billion in 2024. Analysts forecast that the industry could surpass $1 trillion annually by 2033, positioning prediction markets as a core component of financial infrastructure.
Prohibited contracts
The legislation outlines strict prohibitions. Contracts tied to high school or minors’ sports, individual health status, and so-called “death markets”, including assassinations, attempted killings, and mass casualty events, would be banned.
More than 20 lawsuits and cease-and-desist actions are currently active across the country. For one, a coalition of 38 states supports Maryland’s position that prediction markets fall under state gambling law, according to the National Conference of State Legislatures.
Restrictions on market providers
HB 2711 further stipulates: “A provider may not offer a prediction market in this Commonwealth if the prediction market includes, as a liquidity provider or market maker, a person that knowingly engages in a gaming activity in the ordinary course of business.”
If passed, this provision would immediately ban licenced sportsbooks like DraftKings and FanDuel from operating prediction market platforms in Pennsylvania.
Additionally, violators could face steep penalties. Civil fines that could reach $10,000 per violation, while repeated breaches involving market-making, exclusion rules, or insider trading could escalate to $50,000.
Individual liability penalties may climb to $50,000 or twice the profits gained or losses avoided. In extreme cases, the attorney general could seek court orders to prohibit operators, with noncompliance punishable by fines of up to $1 million per day.
Legislative path ahead
The bill has been referred to the Consumer Protection, Technology & Utilities Committee for review. While Pennsylvania already has a mature sports betting industry, HB 2711 faces a long legislative path before becoming law. For instance, the Commodity Futures Trading Commission (CFTC) continues to assert that its jurisdiction exempts these platforms from state-level restrictions, keeping the federal-versus-state debate alive.
Overseas, international jurisdictions view prediction markets differently, and they are highly fragmented. The EU categorises them as financial instruments under MiCA while the UK and many Asian jurisdictions regulate them as gambling or ban them outright.
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